After Citizens United: How Outside Spending Shapes American Democracy
75 Pages Posted: 17 Aug 2016 Last revised: 21 Apr 2020
Date Written: March 1, 2019
We study the political consequences of lifting restrictions on the funding of groups engaging in outside spending (e.g., independent political advertising) in elections. Theoretically, we assume that outside spending changes the salience of candidate-specific attributes relative to their party labels. Empirically, we employ a difference-in-differences design that exploits the removal of state-level restrictions on the funding of outside spending mandated by the federal-level rulings in both Citizens United and SpeechNow.org v. FEC. We find strong evidence that these regulatory changes increase the electoral success of Republican candidates, thereby leading to more ideologically conservative legislatures. We do not find an effect on polarization. Consistent with our theory, the effect of outside spending depends on the power of labor unions and the alignment of business interests with the Republican party.
Keywords: Outside Spending, Salience, Interest Groups, Polarization
JEL Classification: D70, D72, D78
Suggested Citation: Suggested Citation